If your pension plan was heavily invested in stock before the Oct. 19 market crash, the quarterly statement you received in the mail wasn`t pretty.

But it wasn`t devastating either -- substantial gains in the first nine months of the year probably offset the short-term loss of the quarter.

Although most pension plans were not seriously hurt by stock market crash, the decline has raised questions about what percentage of pension funds should be invested in equities, which can provide a higher return but also pose a greater level of risk than other investments.

The Employee Benefit Research Institute in Washington, D.C., reports that the stock market decline, plus recent tightening of pension fund laws and accounting standards, may encourage managers to move some funds out of active equities and into index funds, fixed income funds and bond fund portfolios.

According to a survey of 174 pension funds by the U.S. General Accounting Office, asset values dropped by $34.5 billion in the last quarter of 1987, but that was offset by an increase of $51.5 billion during the first nine months of the year.

Although there were some significant exceptions, the asset increases and decreases in pension plans during 1987 were related to the proportion of assets in stock, and the rise and fall of the stock market.

Your pension plan was probably hurt by the stock market crash if it was a defined contribution plan. The other common type of pension plan, the defined benefit plan, does not depend on investment returns.

In a defined contribution plan, employers pay a specific amount into the pension fund for each participant. Payments accumulate along with investment and interest earnings. Employers may contribute either a percentage of salary or profits. There are a variety of defined contribution plans including 401(k) plans and employee stock ownership plans.

When a defined contribution fund suffers losses, participants` account balances fall. How much they fall may depend on what percentage the participant has invested in stocks vs. less risky investments, such as a money-market fund. Participants whose account balances were heavily invested in stock suffered substantial short-term losses in the fourth quarter of 1987, the Employer Benefit Research Institute said.

Defined benefit plan participants generally are not adversely affected by a stock market decline because benefit levels do not depend on investment returns. In a defined benefit plan, each employee`s benefit is determined by a specific formula, which is usually based on the employee`s earnings and length of service.

The difference between the pension plan structures was evident in the GAO`s study.

Joseph Delfico, senior associate director of the GAO`s human resources division, said in congressional testimony that the poorest performing defined contribution plans lost more than the poorest performing defined benefit plans. But the best performing defined contribution plans gained more than the best performing defined benefit plans.

He said one of the reasons most pension plans were not seriously affected by the stock market decline was diversification of assets. The average asset portfolio last Sept. 30 was about 56 percent in stock; 19 percent in bonds; 14 percent in cash and guaranteed investment contracts, which provide a fixed rate of interest; and 11 percent in other investments, such as real estate, mortgage-backed securities and annuities.

As of Dec. 31, 1987, the 174 plans surveyed by the GAO still had about 47 percent of their total assets in stock.

Smith said it took some time for pension managers to evaluate what had happened to the market after the crash.

``There was more of a focus on potentially a second shoe dropping,`` Smith said.

And many pension funds remain invested wholly in equities, but diversify through global investing.

``Global investing provides a greater degree of diversification.,`` said Frank Helsom, president of Templeton Investment Counsel.

It provides ``substantial returns and a lower level of risk than domestic- only portfolios,`` he said.